What you need to know about the Installment Agreements to the IRS
Here are the “10 Golden Tips”
1. Four million taxpayers are currently using Installment Agreements to pay their IRS taxes. It is the most common way to close your current IRS issue or case.
2. IRS will want a completed Form 433A or 433F, collection information financial statement, with supporting documentation. They will use this to determine if you are eligible for an Installment Agreement and how much your payments will be.
3. An Installment Agreement stops all enforced collection action immediately. It suspends the open case in the IRS enforced collection system.
4. The Installment Agreement allows you to make reasonable and affordable payments to the Internal Revenue Service.
5. The IRS will release any tax levies they may have filed if an Installment Agreement has been reached.
6. The IRS has two types of Installment Agreements, streamline and long term. The amount owed determines which agreement you are eligible for. Under $25,000 qualifies for the streamline which can be handled over the telephone.
7. An Installment Agreement still allows you to file an Offer in Compromise. Make sure your situation will qualify you for an Offer in Compromise.
8. With an Installment Agreement, penalties and interest continue to accrue on the total amount due to IRS.
9. Federal Tax Liens are not released because of Installment Agreements.
10. The Installment Agreement is only a temporary solution. At the end of the day the tax must be paid in full, have the statute expire or have the IRS accept an Offer in Compromise to fully close the case off the IRS system.
At the end of the day, there should be a clear exit strategy on how your case will be settled. Call Fresh Start Tax to help with your strategy. 1.866.700.1040